$4.00 Gas and Your Commute

By now I think it is safe to assume that $4.00 gas prices probably won’t be going away. If I told you I remember paying 27 cents a gallon, you would probably think I’m older than dirt, but I’m not really. (Would you believe I was buying it for my lawn mowing job when I was 10? Didn’t think so.)

I am willing to bet that these rising gas prices are causing people to reconsider their driving habits. I heard that home sales along mass transit routes like Charlotte’s light rail are doing very well. For those suburbanites that will not or cannot use mass transit, consider this alternative: Live closer to your place of employment. If you are one of the many people with a commute of twenty or more miles each way every day you could benefit from changing that dynamic. Two hundred miles a week with a vehicle getting twenty miles per gallon at $4.00 per gallon is $40.00 a week to get to work. Ouch. If you’re driving a Hummer, you need to email me right now.

If you own a home but have a long commute, consider listing your home and searching for one that cuts your gas consumption from your commute. That might free up some gas money in the budget for a little leisure travel.

If you currently rent, no matter what your commute is like, have you thought about the tax benefit of home ownership and how that could improve your cash flow? According to the federal government’s GinnieMae website there are several strong reasons to buy versus rent. I borrowed this graphic from their website to make the point: Homewowners begin saving versus paying rent in the first three years. Add to that fact the money you could save by living close to your place of employment, and that’s a strong argument for considering a move.

If you think this makes sense for you, why not give me a call or email me, and we can look for a neighborhood that can help you and your family budget.

Buy vs. Rent Comparison
The chart below shows a cost comparison for a renter and a homeowner over a seven year period.

• The renter starts out paying $800 per month with annual increases of 5%
• The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
• After 6 years, the homeowner’s payment is lower than the renter’s monthly payment
• With the tax savings of homeownership, the homeowner’s payment is less than the rental payment after 3 years

 

Years	Rent Payment	Mortgage Payment	Monthly Difference	After Tax Savings	Yearly Difference	After Tax Savings
1	800	1000	-200	-50	-2400	-600
2	840	1000	-160	-10	-1920	-120
3	882	1000	-118	+32	-1416	+384
4	926	1000	-74	+76	-888	+912
5	972	1000	-28	+122	-336	+1464
6	1021	1000	+21	+171	+252	+2052
7	1072	1000	+72	+222	+864	+2664
8-30			Savings increase every year

 

Charlotte Real Estate Market Leveling

Recent statistics for the Charlotte real estate market indicate that we may have reached the bottom of the sales slump, a decline nowhere near what most of the country has experienced. Average home sales price is $223,946, down a “sliver,” according to a recent Charlotte Observer article penned by Allen Norwood.

Norwood, citing the President of the Charlotte Regional Realtors Association, Dot Munson, writes that it appears that if we can maintain current conditions for a few more months, we should be okay. Two factors that could contribute to a market turnaround are the presidental election and a possible rise in mortgage rates.

I believe that even in a close presidential election in Novemner, at least half of the people will be happy about the outcome. Once the election is decided, and we aren’t being bombarded with political ads and media coverage of how awful everything is, we can return to a more normal existence. One thing I know is that our plight is seldom as bad as presidential candidates make it out to be. Curent inflation statistics aside, the investing adage, “buy low, sell high” applies to real estate as well. Now would be a great time to find that home you’ve wanted. While you probably won’t be able to steal a home, you could find a great value that will appreciate over time. Just remember, real estate isn’t day trading.

If you would like to search for a new home, but don’t know where to begin, let me suggest an automated search of the MLS that alerts you via email of properties for sale that meet your specific needs. I can help you with that, and it is free. Just call me or email me and we can have your search running in a few minutes. Are you ready?

Selling Versus Renting

During tough real estate market conditions like most of the country is experiencing lately a lot of homeowners that have their home listed are having a hard time finding a buyer. A lot of those owners are beginning to consider renting the home out instead of selling it, so they can move on to their next home.

While that sounds like a plausible solution, it is not one to be entered into lightly. If you have never owned rental property before, I recommend doing a lot of research before heading down that path. Some things to consider are current rental values in your area, costs associated with being a landlord, and the ratio of expected rent to your mortgage payment. Renting your home out may not be the solution you are seeking.

I am not an expert on rental investments, but I do know two things; first, while the total monthly amount of your mortgage on the rental house is counted as debt, only 75% of the monthly rent will count towards income. This will negatively impact your debt to income ratio, as calculated by lenders. Second, monthly rents need to be considerably higher than the mortgage payment to cover costs like repairs or missed payments. Here’s a good place to learn more about costs associated with rental investments.

Bottom line here is that unless you really want to have income-producing real estate, it might be wiser to reduce the price of your home to sell it more quickly rather than get bogged down in the investment property world.

New Home Search Feature!

Here’s some good news to those of you who visit this site often. I have added a new feature that will allow you to search the Carolina MLS right from the Home Page of my blog. Thanks to Century 21 Hecht Realty all you need to do now is click on the graphic in the right hand column that says “Search MLS” and enter your search criteria. You will be searching not just my listings, or Hecht Realty’s listings, but every active listing in the MLS.

When you’re done searching, just close the box with the red “X” in the upper right hand corner, and you will be right back here. If you find something that interests you, don’t hesitate to call or email me, and we can set up a time to visit the home at your convenience. Now is s good time to look; and a good time to buy.

How About Dinner and A Movie, Then the Kiss Goodnight?

 

 

 I just came back from Central Florida, where I was put into a sort of role reversal   situation. Instead of being the realtor, my wife and I were interviewing agents for the right to list the home of my father in law, who just passed away after golfing three times a week until his death at 92. (I mention the golf because I want you to know that he certainly had nothing to complain about to God when he got to “that great 19th hole in the sky.”)

Anyway, when I was just beginning my career, part of new agent training was role playing our listing presentations.  While in Florida, I got to critique a few presentations myself, and I still was able to learn something. Not necessarily about what to do, but more of a reinforcement of what not to do. In fairness to the agents in the Seminole State, they are dealing with a market with way more supply than demand, and  falling price conditions. So for them, proper pricing is critical to success.

Having said that, an agent needs to remember that before a potential client wants to hear about all the reasons why they have to price their house low, they would like to have the opprtunity to share why they are selling, where they are going, what they love about their home, what they think is special, etc. Then they might be open to hearing about you and your company, and then finally have a discussion about price.

One experience we had included not one question about us or the house. The agents (a team) didn’t even bother to look at the house. They came with a market analysis already done, and spent the first half of the interview in a lengthy analogy designed to demonstrate the need for correct pricing, supported by umpteen glitzy graphs and charts. Needless to say we decided not to work with that team.

Here’s the lesson that was reinforced by that experience: No one cares how much you know until they know how much you care. Corny? Trite? Well, cliches exist for a reason. The only thing these agents could have done worse is walk in, present the contract and ask for signatures before sitting at the table.

Listen, if you interview a real estate agent, and the session doesn’t begin by you doing the talking and the agent the listening, then you aren’t done looking yet. If an agent tries to present a market analysis before he or she has seen your home, be wary. To be done properly, a visual inspection of the property is necessary. When I grew up, I was taught that first got to know your date, and then you asked for the goodnight kiss. I tried it the other way around a few times, but it never worked.

There are a lot of good agents in the Lake Norman area, and there are some not so good. If you aren’t sure who to call, or happen to be one of the dozen or so people in North Carolina that doesn’t have a friend, or your mother, in the business, call me and I can help. Or you can email me and I will send you a brief outline of how I market a home. I serve the Lake Norman area, North Mecklenburg County, Iredell County, and Westerm Cabarrus County.